Between 62 and 73, a Retiree With $400,000 in an IRA Can Convert About $35,000 a Year at 12%. Most Convert Nothing, Then Pay 22% on All of It at 73.
Most retirees sit on a golden tax window between retirement and their first forced withdrawal, then watch it close without ever using it. What happens inside that gap determines whether the IRS or your heirs collect the bigger check.
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The stretch between stepping away from work and taking required minimum distributions (RMDs) is the most valuable tax-planning window most retirees ever get. While the SECURE 2.0 Act pushed the statutory RMD age out to 75 for workers born in 1960 or later, many savers target age 73 as their operational finish line to align with Medicare transitions and Social Security claiming. Wages have stopped, benefits are often deferred to compound at 8% a year, and mandatory withdrawals have not begun. That temporary drop in taxable income creates an ideal runway to execute Roth conversions at bargain rates before the IRS forces the money out.
This gap represents the lowest taxable baseline most adults will ever experience. That temporary dip creates an ideal runway for a Roth conversion, moving money from a traditional IRA into a Roth while ordinary income rates are at rock bottom. With minimum wages or mandatory distributions filling the brackets, you lock in the lowest possible marginal rate on every transferred dollar.
How the 12% Bracket Math Works in 2026
For a single filer in 2026, the IRS set the standard deduction at $16,100, the 12% bracket applies to income over $12,400, and the 22% bracket begins above $50,400 of taxable income, according to IRS Revenue Procedure 2025-32.
For married couples filing jointly in 2026, the standard deduction is $32,200, the 12% bracket starts above $24,800, and the 22% bracket begins above $100,800.
Filling the 12% bracket means converting just enough each year to bring taxable income to the top of that threshold without spilling into the 22% bracket. For a single retiree living on a modest baseline of outside cash or taxable dividends, that math leaves roughly $35,000 a year in conversion headroom ($50,400 bracket ceiling minus taxable baseline income). Systematic annual transfers of about $35,000 across that gap window steadily migrate a $400,000 traditional balance into a tax-free Roth, locking in a known 12% rate on money that would otherwise face higher rates later.
Cost of Wasting the Window
Retirees who convert nothing during this window leave that $400,000 compounding untouched inside a tax-deferred wrapper. Assuming a modest 6% average annual return, an untouched $400,000 balance doubles to over $800,000 by age 75, triggering a first-year mandatory RMD of roughly $33,000. Stacked directly on top of $30,000 or more in annual Social Security benefits, those forced distributions shove taxable income straight past the 12% threshold, subjecting future withdrawals to the 22% bracket for the remainder of retirement (we sized up that stretch between the last paycheck and the first RMD in a free Roth conversion guide).
Second-Order Effects Worth Naming
Roth conversions are not free of side effects. A conversion raises modified adjusted gross income (MAGI), the figure Medicare uses to set premium surcharges. That can trigger IRMAA, the income-related monthly adjustment amount, which increases Medicare Part B and Part D premiums two years after the conversion year.
Conversions can also increase the taxable portion of Social Security benefits, since the formula that determines how much of the benefit is taxed is itself based on other income. And the tax owed on the conversion is best paid from a taxable brokerage account rather than from the converted amount itself, because paying tax out of the IRA shrinks the Roth balance and, if the retiree is under 59 and a half, can trigger a penalty.
The 2027 Social Security COLA is tracking toward 3.1%, which nudges benefit income higher and, for retirees already claiming, shrinks the room left in the 12% bracket for conversions. That is another reason the early gap years, before benefits are claimed, tend to be the cheapest.
Summary of the Gap-Year Window
The gap window is longer than most articles suggest for anyone born in 1960 or later; the 12% bracket in 2026 is defined by sourced IRS figures; and the second-order effects are real but manageable when the conversion is sized to the bracket rather than the balance. Retirees who convert nothing defer the tax to later, on a larger balance, at a higher rate.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
